If workers and firms adjust their expectations of future prices in a higher price level, the short-run aggregate supply curve shifts to the right.

Name: If workers and firms adjust their expectations of future prices in a higher price level, the short-run aggregate supply curve shifts to the right.
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Question

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When workers and firms expect higher future prices, they anticipate higher costs, leading to a decrease in short-run aggregate supply, shifting the curve to the left.

If Workers and Firms Adjust Their Expectations of Future Prices